Cameron, rather than reading the article, why not read the SEC Filing.
mredgar.com
SirVinny
Here is another excerpt:
America Online. In February 1997, the Company entered into an agreement
with AOL to provide AOL subscribers with access to the Company's auction sites.
AOL is the world's largest online service provider with a subscriber base of
over 15.0 million people. BID.COM's Web site initially went live with an AOL
branded interface, the "AOL Online Auction." Satisfied with its initial
relationship with AOL, the Company entered into a non-exclusive Interactive
Marketing Agreement (the "AOL Marketing Agreement") with AOL in November 1997
under which the Company agreed to purchase $1.25 million (Cdn$1.75 million) of
advertising and promotion from AOL each quarter through October 1999. The AOL
Marketing Agreement provided BID.COM with anchor tenant positioning in a number
of AOL's E-commerce offerings, plus various keywords such as "Online Auction."
In March 1998, the brand the Company used within AOL was changed from Online
Auction to BID.COM The Online Auction, and was supported by substantial online
advertising. Pursuant to the AOL Marketing Agreement, the Company provided
product procurement, transactional processing and order fulfillment services to
AOL in connection with BID.COM The Online Auction. The agreement also provided
that after the Company reached certain revenue thresholds or received a
specified number of cumulative impressions on AOL Web sites, AOL would be
entitled to receive 50% of the Company's excess gross profit earned from such
revenues or impressions. The AOL Marketing Agreement was to expire on November
1, 1999.
In March 1999, the Company and AOL terminated the AOL Marketing
Agreement and entered into a new non-exclusive agreement. Under the new
agreement, AOL continues to provide BID.COM with anchor tenant positioning in a
number of AOL's E-Commerce offerings, plus various key words such as "Online
Auctions," and the Company will continue to provide product procurement,
transactional processing and order fulfillment services to AOL in connection
with BID.COM The Online Auction. Under the new agreement and related
arrangements, the Company's advertising payments to AOL are reduced to $3.0
million for the 13 month period of the agreement from $5.0 million annually
under the old agreement. In addition, the new agreement eliminates the revenue
sharing arrangement. Prior to the termination of the old agreement, the revenue
sharing thresholds had not been reached. The new agreement expires on March 31,
2000.
In February 1997 AOL purchased an aggregate of 1.0 million Common Shares
for an aggregate purchase price of Cdn$1.0 million, which was paid by AOL
extending to the Company advertising credits in the same amount. A
representative of AOL currently serves as a member of the Company's Board of
Directors. See "Directors and Officers of Registrant" and "Interest of
Management in Certain Transactions." |
